How to Use Moving Averages for Beginner Day Trading

How to Use Moving Averages for Beginner Day Trading

Disclaimer: This article is for educational purposes only and should not be considered financial or investment advice. Trading involves risk, including the loss of capital. Always do your own research or consult a licensed financial advisor before making trading decisions.

Last Updated: November 2025

Introduction: My First Chaotic Week With Charts; And How Moving Averages Saved Me

I still remember my first week trying to day trade.
It was chaos.

Charts everywhere, candles moving too fast, indicators I didn’t understand, and a constant fear of pressing the wrong button. I kept jumping into trades based on gut feeling, hoping price would magically move in my favor. It didn’t. I was reacting emotionally, not logically.

Then someone told me a sentence I never forgot:

“If you don’t know what the trend is, you don’t have a trade.”

And that’s when I discovered the tool that finally made charts make sense:

Moving Averages.

Simple. Clear. Beginner-friendly.
They don’t predict the market, but they give structure, direction, and confidence.

Today, I’ll show you how to use moving averages the right way as a beginner day trader. No complicated math. No confusing formulas. Just practical guidance that immediately improves your decisions, whether you trade stocks, forex, or crypto.

Data and insights in this article are condensed from trusted 2025 sources including Investopedia, Morningstar, and Forbes Advisor, blended with real chart-based experience to maintain credibility without sounding academic.

What Exactly Is a Moving Average? (And Why Beginners Love It)

A moving average, or MA, is simply the average price over a certain number of candles.

It smooths the chart and helps you see:

·  The trend (up, down, or sideways)

·  Potential reversals

·  Good buying and selling areas

·  Market momentum

·  Market “noise” vs “real direction”

Think of it like cleaning a dirty window:
You suddenly see what’s happening behind the mess.

For beginners, moving averages are perfect because:

·  They are not subjective

·  They reduce emotional decision-making

·  They visually show you when to avoid trading

·  They guide your entries and exits

·  They help you avoid chasing price

You’re not guessing anymore, you’re following structure.

The Two Moving Averages Beginners Should Start With

There are hundreds of MAs, but beginners don’t need them all.

Focus on two:

1. The 9-Period EMA (Fast Line)

Used for:

·  Momentum

·  Quick pullback entries

·  Deciding if the trend is accelerating

·  Short-term confirmation for day traders

2. The 20-Period EMA (Slow Line)

Used for:

·  Identifying the main trend

·  Spotting clean pullback zones

·  Avoiding fake breakouts

·  Confirming strong vs weak markets

Why EMAs instead of SMAs?
EMAs react faster, which is ideal for day traders who need speed.

How Moving Averages Reveal the Trend (The Beginner’s Secret Weapon)

Here’s the simple rule every newbie must memorize:

If price is above the 20 EMA → Uptrend

If price is below the 20 EMA → Downtrend

If price is stuck inside the EMA → No trade

Day trading becomes dramatically easier once you follow this.

When I first applied this rule, I instantly removed:

·  Bad entries

·  Choppy markets

·  Emotional gambling

·  Hesitation

Because the trend tells you which direction has the highest probability.

Avoid trading against the direction of the EMAs.

This single adjustment can reduce beginner losses by more than half.

The 3 Beginner-Friendly Moving Average Setups (Simple & Profitable)

Setup 1: The EMA Trend Pullback (Safest for Beginners)

This is the cleanest, simplest strategy for new traders.

You look for:

1.    Strong trend

2.    Price pulls back into the 9 or 20 EMA

3.    A confirmation candle

4.    Entry in the trend direction

Why it works:
Pullbacks show institutions are adding positions, not reversing.

You’re not predicting, you’re joining the winners.

This strategy works because:

·  You avoid tops and bottoms

·  You trade with momentum

·  You enter during controlled pauses

·  You reduce fear

·  You avoid FOMO entries

If I could teach beginners only one pattern, it would be this one.

Setup 2: The EMA Crossover for Trend Reversal (Use Carefully)

Crossover means the fast EMA crosses the slow EMA.

Bullish crossover → 9 EMA crosses above 20 EMA

Bearish crossover → 9 EMA crosses below 20 EMA

Crossovers are late signals, but they are useful for:

·  Spotting early trend changes

·  Avoiding getting trapped in reversals

·  Confirming new directions

As a beginner, wait for:

·  The crossover

·  Price to retest the EMAs

·  A confirmation candle

Don’t jump early, crossovers alone are not enough.

Setup 3: Using Moving Averages as Support & Resistance

Think of EMAs as dynamic floors and ceilings.

In an uptrend:

·  The EMAs act as support

·  Price touches them, bounces, and continues up

In a downtrend:

·  EMAs act as resistance

·  Price hits them, drops again

Beginners love this because:

·  You know exactly where to wait

·  You enter calmly instead of chasing

·  You reduce emotional impulse trading

The Psychology Behind Moving Averages (Your Real Enemy Isn’t the Chart)

Moving averages do more than guide your strategy.

They guide your mind.

In day trading, fear and greed destroy beginners long before technical mistakes do.

EMAs reduce both:

Fear

Because you see a structure that gives you confidence and removes doubt.

Greed

Because you only enter when price returns to a logical zone instead of chasing.

FOMO

Because you wait for pullbacks.

Overtrading

Because EMAs show when the market is sideways so you avoid bad setups.

When your eyes follow a system,
your emotions stop chasing randomness.

The Biggest Mistakes Beginners Make When Using Moving Averages

Mistake 1: Using too many MAs

Stick to 9 and 20.
More lines = more confusion.

Mistake 2: Trading every crossover

Crossovers are not entries alone.
You need context.

Mistake 3: Entering far from the EMA

If price is far from the moving average, momentum is stretched.
Wait for pullbacks.

Mistake 4: Ignoring higher-timeframe trends

Even for day trading, check the 15-min or 1-hour chart.
A tiny EMA setup against a strong higher trend is dangerous.

Mistake 5: Thinking EMAs predict the future

They don't.
They guide, not predict.

How to Practice Moving Averages (Beginner-Proof Routine)

Step 1: Open a chart (stocks, forex, or crypto)

Add the 9 EMA and 20 EMA.

Step 2: Go to the 5-minute or 15-minute chart

Perfect for day trading.

Step 3: Look for:

·  Clean trend

·  Pullbacks to the EMAs

·  Confirmation candle

Step 4: Avoid everything that looks messy

Choppy markets = no trade.

Step 5: Journal every trade

Write:

·  Why you entered

·  Which EMA setup

·  What you felt emotionally

·  What you should improve

Trading becomes easier when your system replaces your emotions.

Final Thoughts: Master the Basics Before the Market Masters You

Moving averages are not magic.
They won’t make you rich overnight.
But they give you something far more important:

Clarity. Structure. Confidence. Consistency.

If you are a beginner day trader, mastering the 9 and 20 EMAs can literally cut your learning curve in half. They help you avoid bad markets, join strong waves, and stop trading based on fear and hope.

The market will always be chaotic.
But your approach doesn’t have to be.

If you apply the moving average strategies in this article, not just read them, your trading decisions will immediately become calmer, cleaner, and smarter.

Related Reading

- Long-Term vs Short-Term Investing: Which Strategy Fits You Best?

- Risk Management for Beginner Investors: How to Protect Your Money While Growing It

Written by Mohammed, personal investor and writer behind Investing Newbie. After years of struggling with debt and learning through real financial mistakes, I now share honest lessons to help beginners rebuild confidence and start their investing journey with clarity and courage.